International Financial Management

2021/2022

Academic Year

ENG

Instruction in English

4

ECTS credits

Delivered at:

Магистерская программа "Международный бизнес", направление подготовки "Менеджмент"

Course type:

Elective course

When:

1 year, 4 module

Instructor

Stepanova, Anastasia N.

Course Syllabus

Abstract

This course is a corporate finance course of an advanced level. The key goal is to provide the student with sufficient knowledge to understand the logic of the modern financial analysis of strategic decisions in multinational corporations including investment and financing policies. The course is focused on the specific features of decision-making process in multinational corporations. The first part of the course constitutes the introduction to the analysis of operating, sovereign and institutional risks of multinational corporation. The second part of the course reviews specific tools and techniques applicable to the investment valuation of multinational company. The third part is devoted to the diversity of instruments available for emerging market company in global capital markets. Every lecture in this course is followed up with the in-class case studies. The course includes 4 case studies on (1) risks of multinational corporation; (2) global asset pricing models; (3) investment valuation in multinational corporation; (4) raising capital in global capital markets. The course covers such topics as types of risks of multinational corporation; currency risk in international projects; global asset pricing models; specific features of investment valuation for international projects; capital structure with the focus on particularities of raising capital in global capital markets. Pre-requisites: Introduction to Managerial and Financial Accounting, International Relations, World Economy, Foundations of Managerial Economics, International Corporate Finance, International Business Research.

Learning Objectives

• learn main features of multinational companies and explain why we should pay attention to international character of the company
• define key hedging techniques applicable to currency risk of international project
• learn how and when to use derivatives as currency risk hedging instrument
• know the logic and the mechanism of raising the capital by multinational companies;

Expected Learning Outcomes

• apply key asset pricing models to multinational companies
• be able to classify the risks of multinational corporation
• know how to evaluate the currency risk exposure
• take into account the international character of the business while making equity valuation
• value the potential investment projects of the multinational company
• Student will get to know: - Specifics of company analysis based on the principles of corporate finance; - Principles of forming company’s cash flows; - Criteria for selection of investment projects both related and non-related to the concept of net present value; - Forecasting exchange rates. Measuring exposure to exchange rate fluctuations. Managing transaction exposure. Managing economic and translation exposure.

Course Contents

• Introduction. Risks of international corporation
• Currency risks of international corporation
• Required return of an international corporation. Cost of capital for international projects.
• International Corporation in Global Capital Markets 1: Capital structure and Debt Capital Markets
• International Corporation in Global Capital Markets 2: Equity Capital Markets.
• International Projects: some valuation issues.

Assessment Elements

• Online class work (case studies)
• Final/ home exam assignment
• Online class work (case studies)
• Final/ home exam assignment

Interim Assessment

• 2021/2022 4th module
  0.6 * Online class work (case studies) + 0.4 * Final/ home exam assignment

Bibliography

Recommended Core Bibliography

• Damodaran, A. (2012). Investment Valuation : Tools and Techniques for Determining the Value of Any Asset (Vol. 3rd ed). Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=442924
• Eiteman, D. K., Stonehill, A. I., & Moffett, M. H. (2013). Multinational Business Finance: Global Edition (Vol. Global ed., 13th ed). Boston [Mass.]: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1417955
• Kim, W., & Weisbach, M. S. (2008). Motivations for public equity offers: An international perspective. Journal of Financial Economics, (2), 281. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.eee.jfinec.v87y2008i2p281.307
• Pagano, M., Panetta, F., & Zingales, L. (1996). Why Do Companies Go Public? An Empirical Analysis. CEPR Discussion Papers. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.p.cpr.ceprdp.1332
• Vernimmen, P. (2011). Corporate Finance : Theory and Practice (Vol. 3rd ed). Chichester, West Sussex: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=398584

Recommended Additional Bibliography

• Butler, K. C. (2012). Multinational Finance : Evaluating Opportunities, Costs, and Risks of Operations (Vol. 5th edition). Hoboken, NJ: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=480242